Bankruptcy Evaluation Service And System

ABSTRACT

A method for assigning a value to a debt is disclosed. The method includes entering, into a digital computer, bankruptcy data associated with a bankruptcy proceeding after a debtor has filed for bankruptcy. The bankruptcy data may include priority claim data associated with priority claims, non-precedence claim data associated with non-precedence claims, and bankruptcy plan data. After the bankruptcy data are obtained, the digital computer determines a present value associated with at least one non-precedence claim in the non-precedence claims.

CROSS-REFERENCES TO RELATED APPLICATIONS

This application is a non-provisional of U.S. Patent Application No.60/816,129, which was filed on Jun. 22, 2006, and 60/818,261, which wasfiled on Jun. 29, 2006, which are herein incorporated by reference intheir entirety for all purposes.

BACKGROUND

When a person files for bankruptcy under Chapter 13 of the BankruptcyCode, the person's goal is to have the opportunity to repay some or allof his debts, under better terms (e.g., with lower or no interest).Unlike a Chapter 7 bankruptcy, Chapter 13 allows the debtor to usewhatever income he may have in the future to pay off creditors. AChapter 13 bankruptcy is particularly applicable for a debtor who has aregular income. In a typical Chapter 13 bankruptcy proceeding, theUnited States Bankruptcy Code gives the debtor 5 years to pay creditorsback.

In a Chapter 13 bankruptcy proceeding, the entire process is carried outunder the supervision of the courts, with the aid of a Chapter 13Trustee. While a debtor is allowed to keep all exempt property, thecourt approves a new proposed plan for repayment. A written plan iscreated giving details of all the transactions that will occur, and theduration of the same. The repayment must begin within thirty toforty-five days after the case was filed.

One advantage of a Chapter 13 proceeding is that unsecured creditors mayreceive payment on debts ordinarily discharged without payment in aChapter 7 proceeding. For example, if a debtor manages to complete allnecessary payments in a Chapter 13 plan, he is given a fall plandischarge. Yet another advantage of filing for Chapter 13 bankruptcy isthat a repayment plan can be created for the debtor even if creditorsdisagree with it, as long as it is approved by the Court. Although,creditors may file an objection to the plan, in case they have any.

In the Chapter 13 proceeding, there are different types of creditors.They include secured creditors, priority creditors, and unsecuredcreditors. A secured creditor has a secured claim against the debtor. A“secured claim” is a claim that is secured by a lien in the debtor'sproperty by reason of the debtor's agreement or an involuntary lien suchas a judgment or tax lien. The creditor's claim may be divided into asecured claim, to the extent of the value of the collateral, and anunsecured claim equal to the remainder of the total debt. Generally, asecured claim must be perfected under applicable state law to be treatedas a secured claim in the bankruptcy. Certain debts, such as unpaidwages, spousal or child support, and taxes are elevated in the paymenthierarchy under the Code. These are “priority claims”. Priority claimsmust be paid in full before general unsecured claims are paid. Anunsecured creditor has an “unsecured claim” against the debtor. A claimor debt is unsecured if there is no collateral that is security for thedebt. Most consumer debts including credit card debts are unsecured.

In a Chapter 13 proceeding, the secured creditors are paid first. Thepriority creditors are paid next, and the unsecured creditors are paidlast. Unsecured creditors such as credit card issuers may not see anydebt payments until late in the Chapter 13 bankruptcy proceeding (e.g.,after 36 months), and they will typically receive only a fraction of theoriginal debt owed to them. In addition, sometimes, the Chapter 13debtors may become unemployed during the Chapter 13 proceeding so thereis always some risk that the unsecured debtors will receive less thanwhat is anticipated during the Chapter 13 proceeding.

For these reasons, unsecured debt is sometimes sold by unsecuredcreditors to debt buyers. The debt buyers may purchase the unsecureddebt from unsecured creditors for some reduced amount. Traditionally,debt buyers have estimated the value of unsecured debt based on theirpast experience buying debt. On the other hand, sellers of unsecureddebt may not have the expertise or experience to value unsecured debt,and may inadvertently sell the debt for less than what is worth.Accordingly, there is a need to help sellers (or even buyers) assign apresent value to unsecured debt.

Embodiments of the invention address these and other problemsindividually and collectively.

SUMMARY

Embodiments of the invention are directed to methods, systems, andcomputer readable media for valuing debt and processing bankruptcy data.

One embodiment of the invention is directed to a method comprisingentering bankruptcy data into a digital computer. The bankruptcy datamay comprise precedence claim data associated with precedence claims,non-precedence claim data associated with non-precedence claims, andbankruptcy plan data. After the bankruptcy data are obtained, thedigital computer determines a present value for at least onenon-precedence claim in the non-precedence claims.

Another embodiment of the invention is directed to a method comprisingentering bankruptcy data associated with a plurality of different courtsinto a digital computer, preprocessing the bankruptcy data, anddetermining a present value associated with at least one claim using thedigital computer and the preprocessed data.

Other embodiments are directed to computer readable media including codefor causing a processor to perform the above methods, as well as serversand systems that can perform the above-described method and othermethods.

These and other embodiments of the invention are described in furtherdetail below with reference to the Figures and the Detailed Description.

BRIEF DESCRIPTION OF THE DRAWINGS

FIG. 1 shows a block diagram illustrating a system according to anembodiment of the invention.

FIG. 2 shows a general flowchart illustrating a method according to anembodiment of the invention.

FIGS. 3( a)-3(b) show a specific flowchart illustrating methodsaccording to embodiments of the invention.

FIG. 4 shows a graphical user interface according to an embodiment ofthe invention.

DETAILED DESCRIPTION

One embodiment of the invention is directed to a method. The methodcomprises entering (either manually or automatically) bankruptcy datainto a digital computer. The bankruptcy data are associated with abankruptcy proceeding after a debtor has filed for bankruptcy. Thebankruptcy data may comprise, among other things, secured claim dataassociated with secured claims, priority claim data associated withpriority claims, and unsecured claim data associated with unsecuredclaims. After the bankruptcy data are obtained, the digital computerdetermines a present value for at least one non-precedence claim. Thedetermined present value may be output to an appropriate output devicesuch as a display device, an audio output device, printer, etc.

Embodiments of the invention allow buyers of debt, sellers of debt, andother entities to value bankruptcy debt. This way, sellers of debt canmake appropriate business decisions regarding whether to keep the debt,sell the debt, or perhaps process the debt in-house.

Illustratively, a debtor may have an unsecured debt of $10,000 with acredit card issuer such as a bank. Because the bank is an unsecuredcreditor, it would be paid after precedence creditors such as securedand priority creditors are paid. The bank would receive a portion of theoriginal $10,000 debt that it is owed over a period of time at the endof the bankruptcy proceeding. Consequently, at the beginning of thebankruptcy proceeding, the bank's unsecured claim against the debtorwould have some reduced present day value.

Embodiments of the invention may be used to determine that the presentday value of the unsecured debt. For example, embodiments of theinvention may determine that the debt is worth $2000 or 20% of theoriginal $10,000 that was owed by the debtor to the bank.

When the present value of the debt is known, the bank may decide whetherto keep the debt and manage the debt in house (i.e., monitor the Chapter13 proceeding and check for timely payments, etc.), keep the debt anduse a contractor to manage the debt, or sell the debt to a debt buyer.In addition, if the bank wants to sell the debt to a debt buyer, thebank will know approximately how much the debt is actually worth so thatthe bank can make a decision regarding whether or not a debt buyer ispaying fair value for the debt. For example, if a debt buyer offers abank $1000 for the unsecured debt that embodiments of the inventiondetermine to be worth $2000, the bank may decide to keep the debt ratherthan sell it.

The present value of the debt is determined using a digital computer. Asused herein, a general purpose programmable “digital computer” mayinclude a memory including one or more volatile or non-volatile memorycomponents such as a ROM (read-only memory) and a RAM (random accessmemory), a processor such as a CPU (microprocessor), at least one inputport and at least one output port. A digital computer according to anembodiment of the invention may be embodied by one or more computationalapparatus that are connected to a communication medium. For example, adigital computer according to an embodiment of the invention may beembodied by a server computer, or even a client computer, that iscoupled to a communication medium such as the Internet. In otherembodiments, the digital computer may be a stand alone computer that mayor may not be connected to an external communication medium.

As will be explained in further detail below, embodiments of theinvention may be used to value claims such as non-precedence claims in abankruptcy proceeding, or claims that may be filed in a bankruptcyproceeding that may occur in the future. As used herein, a “precedenceclaim” includes any type of claim which may be paid prior to a“non-precedence claim.” In one embodiment, precedence claims comprisesecured claims and priority claims, while non-precedence claims compriseunsecured claims. In another example, precedence claims may comprisesecured claims while the non-precedence claims comprise priority claimsand/or unsecured claims.

A number of specific examples are described in detail below toillustrate embodiments of the invention. The examples that arespecifically described below are directed to the valuation of at leastone unsecured debt in a Chapter 13 bankruptcy proceeding. However,embodiments of the invention are not limited to this example.Embodiments of the invention can be used to value debts in any type ofproceeding where there are some creditors will be paid before othercreditors. For example, embodiments of the invention may be used tovalue priority debts and other types of debts in a Chapter 13proceeding. Embodiments of the invention may also be used to value debtsin other bankruptcy proceedings such as Chapter 11 bankruptcyproceedings.

FIG. 1 shows a schematic block diagram of a system 10 according to anembodiment of the invention. The system 10 includes a server computer 50which is in operative communication with a bankruptcy evaluationdatabase 30, and a bankruptcy notification database 31. The bankruptcydatabases 30, 31 may be written in MSSQL 2000 or using any othersuitable protocol. They may be directly connected to the server computer50 as shown in FIG. 1, or connected to the server computer 50 through acommunication medium 64.

The server computer 50 is also in operative communication withbankruptcy courts 16, a data center 60 and various creditors 70(a),70(b) through the communication medium 64. The server computer 50 may bea commercially available server computer that may be purchased from aserver manufacturer such as Dell®. Although FIG. 1 shows one servercomputer 50, one bankruptcy evaluation database 30, and two creditors70(a), 70(b), it is understood that embodiments of the invention mayinclude more or less components than are shown in FIG. 1.

The creditors 70(a), 70(b) may be banks, retail stores or any othersuitable businesses that have extended credit to the debtor. Exemplarydebtors may include individual consumers, businesses, and the like. Inpreferred embodiments, the creditors 70(a), 70(b) are unsecuredcreditors such as banks which hold credit card debt. Each creditor70(a), 70(b) may have at least one client computer 70(a)-1, 70(b)-1, andan output device 70(a)-2, 70(b)-2 coupled to the at least one clientcomputer 70(a)-1, 70(b)-1.

The server computer 50 may be embodied by one or more computationalapparatuses, which can service the requests of one or more clientcomputers. Typically, the server computer 50 is a powerful computer orcluster of computers that behave as a single computer. For example, theserver computer 50 can be a mainframe computer, a minicomputer, or aminicomputer cluster. In another example, the server computer 50 mayinclude one or more database servers and one or more Web servers. Theserver computer 50 may service the requests of one or more clientcomputers (e.g., client computers 70(a)-1, 70(b)-1, or any clientcomputers at the data center 60).

The data center 60 may be any suitable entity that aggregates bankruptcydata from various bankruptcy data sources. For example, the data center60 may be the National Data Center or NDC. The NDC consolidates caseinformation in electronic form for all participating Chapter 13trustees. Data that passes between the server computer 50 and the datacenter 60 may be transmitted in a secure manner (e.g., the data may beencrypted). Also, all files passing between the server computer 50 andthe data center 60 can be zipped and password protected if desired.

As shown in FIG. 1, the server computer 50 includes a processor 50(a),and a computer readable medium (CRM) 50(b). The processor 50(a) mayinclude one or more general purpose microprocessors, which may executeinstructions stored on the computer readable medium 50(b). The computerreadable medium 50(a) may utilize any suitable combination of volatileor non-volatile, electrical, optical, magnetic, or electro-opticalmemory components for storing computer code, which may be executable bythe processor 50(a). Examples of suitable computer readable mediainclude magnetic disks, memory chips, etc. In embodiments of theinvention, different types of data storage mechanisms may form a singlecomputer readable medium. For example, data stored on separate diskdrives on separate computational apparatuses may form a computerreadable medium in embodiments of the invention.

The bankruptcy evaluation database 30 and the bankruptcy notificationdatabase 31 may each store bankruptcy data. In some embodiments, thebankruptcy notification database 31 may comprise initial bankruptcyinformation such as case name, case docket number, debtor accountnumber(s), court name, creditor name, or any suitable identifiersthereof (e.g., numerical codes associated with various creditor names).The initial bankruptcy information may be included in a request to thedata center 60 to retrieve additional bankruptcy data which is stored inthe bankruptcy evaluation database 30 so that a debt evaluation can beperformed. As will be explained in detail below, the additionalbankruptcy data that are retrieved from the data center 60 may includecase file information, claim file information, creditor fileinformation, payment file information, receipt file information, debtorfile information, and request out information. This additionalbankruptcy information may be used to determine the present values ofdebts.

The communication medium 64 may including any suitable combination ofcommunication lines, channels, and radio interfaces, used to exchangeinformation between the server computer 50 and any client computers orother computational apparatuses. According to one embodiment, thecommunication medium 64 may include, for example, the Internet, anintranet, the public switched telephone network (PSTN), or a wirelesstelephone or radio network. According to one embodiment, the servercomputer 50 and various client computers may communicate via the network16 using a TCP/IP based protocol. In one embodiment, the communicationmedium 64 could comprise a payment processing network such as VisaNet™.

FIG. 2 shows a flowchart illustrating a general method according to anembodiment of the invention. The method can be used to determine a valueof an unsecured debt in a Chapter 13 bankruptcy proceeding. Theillustrated method comprises obtaining bankruptcy data (step 500).Initial bankruptcy data such as case docket number, debtor name, andother basic information are used to retrieve additional bankruptcy datafrom a data source such as a data center. After the additionalbankruptcy data are retrieved, a digital computer may preprocess theinitial and additional bankruptcy data that are obtained (step 502).This can be done so that the bankruptcy data are processed moreaccurately and efficiently at a later time. For example, assumptions canbe made for bad or missing data points so that the valuation method canstill proceed despite presence of bad or missing data points in the rawdata received from the data center. At some point, the digital computeruses the bankruptcy data to determine if there is any money left afterpaying the precedence creditors (step 504), the unsecured debt payouttime (step 506), and the monthly payment being made by the debtor (step508). These steps may be performed in this order or in a different orderin embodiments of the invention. The digital computer then determinesthe total unsecured amount to be paid for all creditors, and then makesadjustments to the total unsecured amount (step 510). Once the totalunsecured amount to be paid is obtained, the total present value of theunsecured claims for all unsecured creditors is determined (step 512).Once the present value of the total unsecured amount to be paid isdetermined, the present value of an individual debt claim may bedetermined (step 514).

FIGS. 3( a)-3(b) show a more detailed flowchart illustrating a methodfor determining the value for an unsecured debt in a Chapter 13bankruptcy. In the flowchart, the rectangular blocks are generallyintended to illustrate inputs and outputs, while the diamond blocksillustrate functions that can be performed. Additional functions, whichare not explicitly shown in FIGS. 3( a)-3(b) will be described in thefollowing text description of these Figures. FIGS. 3( a)-3(b) are alsodescribed with reference to the system shown in FIG. 1.

The method shown in FIGS. 3( a)-3(b) assumes a “pot plan” bankruptcyproceeding. A “pot plan” is a plan whereby everyone files a claim, andthe money left over to unsecured debt gets divided between everyone whofiles a claim. In a non-pot plan bankruptcy proceeding, if a creditordoes not file a claim, that creditor's potential recovery could go backto the debtor, instead of the other creditors who did file claims. Forexample, a debtor may owe $1000 to each of 10 unsecured creditors. Ifonly 9 creditors file claims in a pot plan bankruptcy proceeding, thenthe 9 creditors split the amount that will be paid to the unsecuredcreditors. In a non-pot plan bankruptcy proceeding, the unsecured pot ofmoney may shrink by the amount associated with the claim that was notfiled with the bankruptcy court. The debtor may keep the share that thenon-filing creditor would have received in the bankruptcy proceeding.Embodiments of the invention may utilize either pot or non-pot plans.

Referring to FIGS. 3( a)-3(b) and FIG. 1, bankruptcy data are retrievedfrom the data center 60 by the server computer 50 after the servercomputer 50 sends a requester file to the data center 60. The files thatcome back from the data center 60 may be in a “.txt” format or othersuitable data format.

The requestor file may be created using information from variousbankruptcy notification service databases 31. Information from thebankruptcy notification service databases may include BankruptcyNotification Services (BNS) or Bankruptcy Information Service (BIS)court number, EBN (electronic bankruptcy notification) district, EBNdivision, Petition Sequence Number, Case Number, Debtor SSN (socialsecurity number), Account Number(s), Filing Date, Trustee Name, TrusteeCity, and Trustee State. The information in the bankruptcy notificationdatabase 31 may have previously been obtained from the courts 16 by theserver computer 50.

In some embodiments, when sending a requestor file to the data center60, debtor account numbers (e.g., debtor credit card account numbers)that are known to the creditors 70(a), 70(b) may not be sent to the datacenter 60 to ensure that the actual account numbers of the debtors arenot compromised. Alternatively, proxy numbers corresponding to theaccount numbers may be sent to the data center 60. In either case, therequester file that is sent to the data center 60 may be formatted sothat it is compatible with processing performed by the data center 60.

After the data center 60 receives the requester file, the data center 60takes a predetermined amount of time (e.g., 24 hours) to retrieve therequested data, and then sends a return file back to the server computer50. The return file comprises bankruptcy data including case fileinformation 202, claim file information 256, creditor file information260, payment file information 266, receipt file information 270, requestout file information 268, and debtor file information 272. Greater orfewer types of information may be retrieved from by the server computer50 in other embodiments of the invention. The information in each of theforegoing file types is described in farther detail below.

From the claim file information 256 and creditor file information 260,it is possible to determine any member (e.g., bank) priority claimamounts in the plan (258, 262, 264). A requestor status report with thisand other information can be generated, if desired.

Claim file information 256 includes the actual claims that are filedagainst the bankruptcy case. Claim file information 256 includesinformation relating to the types and number of claims on file. Forexample, claim file information 256 may include information such as thenumber of secured, priority, and unsecured claims, and the owners ofsuch claims, and the amounts associated with such claims. It may alsoinclude information about the various amounts paid to date on claims,the amounts of original claims, percentages, the latest creditors onfile at the trustee's office for the claims, etc. In FIG. 3( a), theclaim file 256 includes information about each claim in the bankruptcycase. Such information includes priority claim amount in the plan 250,secured plus claim amount in the plan 252, and unsecured claim amount inthe plan 254.

The creditor file 260 includes mapping information on the creditorsincluding information mapping the names of the creditors to variousidentification codes. In other files, creditors are represented by theidentification codes. Creditor data is related to claim, payment, andreceipt records. Included in this file is the address and contactinformation for each creditor.

The payment file 266 includes information regarding distributions thatare made by the trustee in a Chapter 13 proceeding. This file mayinclude information about payments that the debtor makes to the trusteeas well as payments that the trustee makes to the various creditors.Payment information includes the date a payment was made, the amountthereof, the name of the creditor paid, etc.

The request out file 268 includes a lookup table that matches what issent to the trustee. It contains all of the requestor file fields plusan issuer (status) code as well as the trustee ID and case number forthe matching case.

The debtor file 272 includes information about the debtor. Thisinformation may include debtor name, debtor social security number, etc.

The case file 202 comprises case level information such as debtor name,judges, status, case number, trustee information, plan term information204, plan base information 205, monthly payment information 206,unsecured debt percentage information 224 (relative to the entire debtamount), attorney fee information 224, filing information 226, andtrustee percentage information 228. The trustee percentage is thepercentage amount that the trustee receives on all payments made fromthe plan.

Plan term information 204 may comprise information regarding the termsof the plan. For example, plan term information may include the lengthof the bankruptcy proceeding. The length of a typical Chapter 13bankruptcy proceeding may be 36, 48, or 60 months.

Plan base information 205 may comprise information regarding how muchmoney the debtor is required to pay back to all creditors under theplan. This amount of money is determined by the trustee under thesupervision of the bankruptcy court. For example, if a debtor has$100,000 in debt, the plan base may be $60,000. The $60,000 may have tobe paid back to the various creditors over a predetermined time (e.g.,five years). Another way to define a “plan base” is the amount of moneyin a plan that is used to pay off debts and related fees.

The unsecured percentage 224 may be the percentage of unsecured debt asset by the trustee and that the debtor agrees to pay. For example, thetrustee indicates what percentage of each type of claim will be paidback. For example, the trustee may decide that 100% of the secured andpriority claims will be paid back, but that only 20% of the unsecureddebt will be paid back.

Monthly payment information 206 may comprise information regarding howmuch the debtor's monthly payment will be under the plan. The debtor'smonthly payment under the plan is also determined by the trustee underthe supervision of the bankruptcy court. If this information is notavailable, it may be calculated by dividing the plan base by the numberof months in the plan.

The claim file 256 includes information about the claims that have beenfiled in the bankruptcy proceeding. In this example, the claim file 256includes information about the priority claim amount in the plan 250,the secured claim amount in the plan 252, and the unsecured claim amountin the plan 254.

The creditor file 260 includes information about the creditors that havefiled claims in the bankruptcy proceeding. Creditor file information 260may include information such as the name of the creditor, when thecreditor filed a bankruptcy claim, etc. It is preferable to know who thecreditors are so that the server computer 50 knows which creditor isassociated with the claim that is being processed.

Bankruptcy data such as the plan term information 204, the plan baseinformation 205, and the monthly payment information 206 may bepreprocessed in any suitable manner, before the bankruptcy data isactually manipulated to determine the present value of unsecured debt.Preprocessing bankruptcy data is desirable, because there are multipletrustees associated with different bankruptcy proceedings and differentcourts in the country. The way that the trustees submit their data tothe data center 60 is dependent upon the way that they manage theircases. Various bankruptcy trustees may provide data to the data center60 inconsistently, and the preprocessing step can help to standardizethe data that is received from the data center 60. Also, sometimes, datathat are received from the data center 60 may be missing and/orinaccurate, and preprocessing the data can help address these problems.

The plan term information 204 may be optionally preprocessed 208 to formadjusted plan terms 212. The raw plan term information 204 may bepreprocessed to scrub any potentially inaccurate data that may have beenretrieved from the data center 60. For example, raw plan terminformation may be obtained and preprocessed using one or more of thefollowing rules: if the plan term=0 months, then use60 months; if theplan term>84 months, then use 60 months; and if the plan term<12, thenuse 60 months.

The plan base information 205 may also be optionally preprocessed 214 toform an adjusted plan base 218. For example, the preprocessed plan basemay take the greater of the adjusted plan terms times the monthlypayment, and the plan base that is in the case file 202. In theory, theplan base in the case file 202 received from the data center 60 shouldequal to the adjusted terms times the monthly payment, but these valuesmay not be equal in practice.

The monthly payment information 206 may also be optionally preprocessed210 to form an adjusted monthly payment 216. For example, if no monthlypayment information is provided in the case file 202, it is possible todivide the adjusted plan base by the adjusted plan term to determine themonthly payment.

The unsecured percentage 224 may also be optionally preprocessed to forman adjusted unsecured percentage 230. For example, the unsecuredpercentage 224 may be processed as follows: if the absolute value of theunsecured percentage is greater than 1, then take the absolute value ofthe unsecured percentage and divide by 100. Otherwise, use the absolutevalue of the unsecured percentage. Sometimes, unsecured percentages arereceived as negative values from the data center 60, so taking theabsolute value corrects for this. In addition, the division by 100 isused to change the percentage value received from the data center 60into a decimal format.

The amount of precedence debt 240 is also determined. In this particularexample, “precedence debt” includes any debt which would be paid beforean unsecured debt. Precedence debt includes secured claims, priorityclaims, trustee fees, filing fees, attorney fees, etc.

Once the adjusted plan base 218 is determined, and once the precedencedebt 240 is determined, these two numbers can be subtracted from eachother to determine 220 if there is anything left in the plan to coverthe unsecured debt 222. Sometimes, there is no unsecured debt after theprecedence debt is paid. Other times, there is money left. For example,if the adjusted plan base is $100,000 and the precedence debt is equalto $60,000, then $40,000 would be left to pay unsecured debt.

Another way to calculate the amount of unsecured debt in the plan is totake the unsecured claim amount 254 in the plan, and then multiply thisnumber by the adjusted unsecured percentage 230. This gives one theamount 246 that the unsecured debtor agreed to pay. For example, thetotal of all unsecured claims may be $100,000 and the unsecuredpercentage may be 40% so $40,000 would be left to pay unsecured debt.

Adjustments may also be made using the trustee fee 248, which may bedetermined by multiplying the amount that the unsecured debtor hasagreed to pay 246 by the trustee percentage 228. The determinedunsecured claim amount is reduced by the trustee fee 248, since theunsecured creditors will not receives fees that are being paid to thetrustee.

In theory, the calculated unsecured amount should equal the amountpreviously determined above with respect to box 222. However, thesenumbers may not match in practice. Therefore, as shown by function 242,a digital computer such as a server computer selects how to calculatethe unsecured amount to be paid.

As explained above, there are two ways to get the unsecured amount to bepaid. One way is to calculate the unsecured amount based on the plan,and to subtract precedence fees. The amount that is left is theunsecured amount to be paid. The other way is to multiply the unsecuredclaim amounts and the unsecured percentage. In embodiments of theinvention, the unsecured amounts to be paid are calculated using thesetwo methods and the smaller amount is taken to be the unsecured amountto be paid. This results in a more conservative estimate. However, 0%unsecured plans may cause the unsecured amount to be paid to be $0, eventhough many times 0% plans are not representative of the actualunsecured % payback. Therefore, as an additional rule, the digitalcomputer may perform this comparison and take the lower amount, only ifthe unsecured percentage is not zero.

Before or after the unsecured amount to be paid is calculated, thedigital computer can determine how many months it will take to pay backthe unsecured amount to be paid. Taking the adjusted plan terms 212, onemay determine how many months that it will take to pay the precedencedebt 306. For example, the digital computer may take the total amount ofprecedence debt and may divide this by the debtor's monthly payment,thereby determining the number of months required to pay the precedencedebt 308. For example, if there is $20,000 in precedence debt, and themonthly payment is $2000, then it will take 10 months to pay theprecedence debt.

If the adjusted monthly payment is $0, then use $0. Otherwise, comparethe precedence debt including the trustee fee 300 divided by theadjusted monthly payment 302, and the adjusted plan terms 212, and takethe lower of the two. This determines if the precedence fees will use upall the months of payments. For example, if there is $20,000 inprecedence debt (including the trustee fee) and the adjusted monthlypayment is $2000, then the months to pay precedence debt is 10 months.If the plan is 24 months, then there the digital computer would select10 months as the lower of 10 months and 24 months.

Then, the digital computer checks to see if there are months left to paythe unsecured debt 310. It can subtract the number of months to payprecedence debt from the adjusted plan terms to see if there are anymonths left after the precedence debt is paid. Then, the number ofmonths left in the plan is determined 312.

Another check is then made to see if there are months left to pay theunsecured debt 314. If the number of months left in the plan is 0, thenthis number of 0. Otherwise, take the lower of the number of monthsrequired to pay the unsecured amount 318 and the number of months leftin the plan 312. For example, if it will take 10 months to payprecedence debt and there are 24 months in the plan, then there will be14 months left in the plan to pay unsecured claims. If it will take 20months to pay the unsecured debt, then use 14 months. The number ofmonths required to pay the unsecured amount 318 may be determined usingthe adjusted monthly payment 302 and the unsecured amount to be paidincluding trustee fee 304.

Once the number of unsecured payments to be made is determined 316, thisis multiplied by the adjusted monthly payment 218 to thereby obtain theadjusted unsecured amount to be paid plus trustee fee 320. For example,if the adjusted monthly payment is $2000 and the number of months ofunsecured payments is 10, then the adjusted unsecured amount plustrustee fee would be $20,000. Then, the adjusted unsecured amount to bepaid without trustee fee is obtained 322. For example, with respect tothe above example, if the trustee fee is determined to be $1000, thenadjusted unsecured amount to be paid without a trustee fee would be$19,000.

Using the adjusted unsecured amount to be paid without trustee fee 322and the adjusted unsecured amount to be paid with trustee fee, thetrustee percentage is determined 324.

The total present value of all unsecured claims at the start of themonthly payments 328 is then determined. The digital computer devaluesthe amount based on the number of months until the unsecured paymentsstart. Then, a final overall unsecured value associated with allunsecured debts is determined 332. The value of the unsecured debt isdevalued using the time when the unsecured payments will begin and thetime at which the unsecured payments will end. The net present value ofthe payments, for example, may be determined between months 30 to 40, ifunsecured payments are to be made between 30 and 40 months from thepresent date.

At some point, there is then a check to see if there is any moneyleftover for unsecured debt 326. Sometimes, the plan terms do not“equal” each other. For example, information received from the datacenter 60 may indicate that the plan base is $72,000, the monthlypayment is $1000, and the plan term is 60 months. This results in$12,000 being “leftover.” This leftover is added to the pot of unsecuredpayments and is labeled as “leftover.”

Any leftover is determined 330, and is thereafter devalued to presentvalue 340. The digital computer devalues the amount based on the numberof months until the plan is complete.

Then, a final total unsecured value plus leftover amount is thendetermined 342. The leftover amount is assumed to be paid in a lump sumat the end of the plan (minus a trustee fee). For example, if the finalunsecured value is $40,000 and the leftover is $12,000, then the totalfinal unsecured amount to be paid plus leftover is $52,000.

Once the overall unsecured value, or the overall unsecured value plusleftover is determined, the present value of an individual unsecuredclaim may then be determined. For example, the ratio of the individualunsecured claim to the total of all unsecured claims can be determined.This can be used to determine the present value of the particularunsecured claim. For example, if the net present value of all unsecuredclaims is $100,000 and a particular creditor's claim was 10% of theoverall value of unsecured claims, then the net present value of thatcreditor's claim would be $10,000. If that creditor's claim against thedebtor was originally $60,000, the amount associated with the presentvalue of the claim would be 16.7% of the original unsecured debt.

The table below illustrates the type of data that can be generated usingembodiments of the invention. This data shows overall values associatedwith a hypothetical bankruptcy proceeding, the value of all unsecuredclaims owned by a bank A, and the value of a single claim by creditor B.In some cases, a score that is based on the determined present value maybe calculated so that a user such as a bank can easily evaluate thelikelihood of successful recovery in bankruptcy along with an estimatedrecovery value. Information such as this may be provided by any suitableoutput device (e.g., a printer, a display, etc.).

TABLE 1 Single Multiple Claims Claim of Overall of Bank A Creditor BPresent Value of Unsecured Debt at 21.89% 22.32% 20.00% Payoff (as apercentage of original debt) Total Value of Unsecured Debt$10,392,126,501 $294,567,296 $20,000 Total Value of Unsecured Debt at$2,275,294,054 $65,745,980 $4,000 Payoff Total Value of Secured Debt$3,692,822,863 $73,623,216 Avg Value of an Unsecured Claim $4,685 $6,245Avg Value of an Unsecured Claim at $1,154 $1,358 Payoff Total Number ofCases in Analysis 243,933 32,102 Number of Claims in Analysis 2,790,41551,285 Number of Unsecured Claims in 2,207,137 42,354 Analysis Avg # ofMonths Unsecured 25 25 Payment Begins

Although the embodiments of the invention described above with respectto FIGS. 3( a)-3(b) are quite detailed, embodiments of the invention mayinclude any suitable combination and/or number of processing steps thatare described with respect to FIGS. 3( a)-3(b) or shown in FIGS. 3(a)-3(b).

Also, a number of other features may be used in conjunction withembodiments of the invention and in conjunction with the processingsteps in FIGS. 3( a)-3(b). For example, in the processes described withrespect to FIGS. 3( a)-3(b), a user such as a bank may customize thedata that is being input and/or the decisions that are being made sothat the output corresponds to the user's desired output. For example,as explained above, there are two ways to get the unsecured amount to bepaid. One way is to calculate the unsecured amount based on the plan,and to subtract precedence fees. The amount that is left is theunsecured amount to be paid. The other way is to multiply the unsecuredclaim amounts and the unsecured percentage. In embodiments of theinvention, the unsecured amounts to be paid are calculated using thesetwo methods and the smaller amount is taken to be the unsecured amountto be paid. This results in a more conservative estimate. However, inother embodiments of the invention, a user could select the lessconservative estimate if desired using an appropriate selectionmechanism (e.g., a drop down menu on a Web page). Thus for function 242in FIG. 3( a), the unsecured amount to be paid can be manually selectedby a user, or automatically selected by a computer. Any other options inFIGS. 3( a)-3(b) or described herein may alternatively be manuallyselected by a user instead of automatically selected by a computer.

Embodiments of the invention have a number of advantages. First,embodiments of the invention allow creditors to determine the value oftheir claims in bankruptcy before the bankruptcy proceeding ends. Inthis way, the creditors may determine whether or not they want to keepthe debt, or sell the debt. In addition, using embodiments of theinvention, it is possible to even determine the value of creditors'debts even before a debtor files for bankruptcy or before a proof ofclaim is filed.

Embodiments of the invention have other advantages. For example, theNational Data Center can aggregate Chapter 13 plan and payment data fromU.S. trustees across the country. While the data files are in a standardformat, the data is sometimes incomplete and inconsistent acrossdifferent trustees. In addition, the data only provides point-in-timesnapshots of the trustees' databases. In addition to being able to valueclaims in a bankruptcy proceeding, embodiments of the invention can:

-   -   Identify the court and case number of each plan.    -   Identify an accurate, current case status for each plan.    -   Value each Chapter 13 plan, and creditors' cases.    -   Identify trends in the Chapter 13 plan valuation.    -   Identify which claims have been received by the trustee.    -   Identify additional potential recovery value by identifying        unfiled proofs of claims.    -   Determine a consistent, statistically valid bankruptcy recovery        value that can be compared against any selected group's recovery        value(s).    -   Determine individual and selected group recovery scores (e.g.,        by city, state, zip, etc.) within a bankruptcy portfolio to        determine those debts to retain and those to sell.    -   Determine bankruptcy scores up front, at the time of        notification by a debtor—both before and after filing of a proof        of claim.

As explained above, using embodiments of the invention, bankruptcy datamay be cleansed, normalized, standardized, etc. in order to identifywhich court each plan belongs to and prepare data for further analysis.Additional charts, calculations, metrics, reports, and valuation modelscan be produced in order for data to be used in a) calculating the netpresent value of each Chapter 13 plan, b) determining which claims havebeen received by the trustee, and c) projecting plan liquidation curveand recovery rates. A liquidation curve can show a creditor how thecreditor will be paid back over time. The data are merged with otherdata sources in order to provide more accurate, updated information oneach case, such as case status and claim ownership.

FIG. 4 shows an exemplary user interface that can be used in embodimentsof the invention. The user of the user interface may be an operator whois using a digital computer that has software for performing the methodsaccording to embodiments of the invention. A number of buttons are shownin FIG. 4. Each button is described in further detail below.

-   -   “Import BNS Data”—This button is for importing raw BNS        (bankruptcy notification service) data into a BKEval (bankruptcy        evaluation) database.    -   “Import EBNS data”—This button is for importing raw EBNS        (electronic bankruptcy notification service) data into the        BKEval (bankruptcy evaluation) database.    -   “Update NDC Court”—This button is for updating the NDC (National        Data Center) court information to a requestor table in the        BKEval (bankruptcy evaluation) database. The requestor table is        used to create the requester file.    -   “Update TrusteeID”—This button is for updating the trustee        information to the requester table in the BKEval (bankruptcy        evaluation) database.    -   “Update Filing Date”—This button is for updating the filing date        to the BKEval (bankruptcy evaluation) database.    -   “Generate Req File”—This button is for generating the requestor        file for the National Data Center.    -   “Import Return Files”—This button is for importing all seven        return files from National Data Center.    -   “Close App”—This button is for closing the BKEval (bankruptcy        evaluation) application.    -   “BKEval Claim”—This button is for computing claim data for all        cases.    -   “BKEval Case”—This button is for computing case data for all        cases.    -   “BKEval Member”—This button is for computing case data for an        individual creditor.    -   “Trustee Detail 2”—This button is for computing trustee detail        part 2 that is based on trustee ID and case number.    -   “Trustee Overview”—This button is for computing data for each        trustee ID.    -   “Yearly Analysis”—This button is for computing data each year        for all claims.    -   “Regional Analysis”—This button is for computing data each        region for all claims.    -   “Time Series”—This button is for computing data each month for        all claims.    -   “Yearly Member”—This button is for computing data each year for        an individual creditor.    -   “Regional Member”—This button is for computing data each region        for an individual creditor.    -   “PortEval Report”—This button is for generating the final        report.    -   “Liquidation All”—This button is for computing the liquidation        curve for all creditors.    -   “Liquidation Mem”—This button is for computing the liquidation        curve for a single creditor.    -   “Liquid Timebox”—This button is for computing the time-box for        the liquidation curve.    -   “Time-Bound All”—This button is for computing the time-bound        liquidation curve for all cases.    -   “Time-Bound Mem”—This button is for computing the time-bound        liquidation curve for a single creditor.    -   “Cal DateDif Mem”—This button is for computing the Date        Different for each claim (This can be used for both all claims        and a claim for a single creditor).    -   “Cal Actual Payment”—This button is for computing the actual        liquidation curve for all claims and a claim for a single        creditor.

In other embodiments of the invention, it is possible for various users(e.g., banks) to share experiences via peer group reporting techniques.Such techniques allow users to compare their experiences with otherusers.

It should be understood that the present invention as described abovecan be implemented in the form of control logic using computer softwarein a modular or integrated manner. Based on the disclosure and teachingsprovided herein, a person of ordinary skill in the art will know andappreciate other ways and/or methods to implement the present inventionusing hardware and a combination of hardware and software.

Any of the software components or functions described in thisapplication, may be implemented as software code to be executed by aprocessor using any suitable computer language such as, for example,Java, C++ or Perl using, for example, conventional or object-orientedtechniques. The software code may be stored as a series of instructions,or commands on a computer readable medium, such as a random accessmemory (RAM), a read only memory (ROM), a magnetic medium such as ahard-drive or a floppy disk, or an optical medium such as a CD-ROM. Anysuch computer readable medium may reside on or within a singlecomputational apparatus, and may be present on or within differentcomputational apparatuses within a system or network.

The above description is illustrative and is not restrictive. Manyvariations of the invention will become apparent to those skilled in theart upon review of the disclosure. The scope of the invention should,therefore, be determined not with reference to the above description,but instead should be determined with reference to the pending claimsalong with their fall scope or equivalents.

One or more features from any embodiment may be combined with one ormore features of any other embodiment without departing from the scopeof the invention.

A recitation of “a”, “an” or “the” is intended to mean “one or more”unless specifically indicated to the contrary.

All patents, patent applications, publications, and descriptionsmentioned above are herein incorporated by reference in their entiretyfor all purposes. None is admitted to be prior art.

1. A method comprising: entering bankruptcy data into a digitalcomputer, wherein the bankruptcy data comprises precedence claim dataassociated with precedence claims, non-precedence claim data associatedwith non-precedence claims, and bankruptcy plan data; and determining apresent value associated with at least one non-precedence claim usingthe digital computer.
 2. The method of claim 1 wherein the bankruptcyplan data comprises plan term information, plan base information, andmonthly payment information.
 3. The method of claim 1 wherein thenon-precedence claims comprise unsecured claims, and wherein thebankruptcy proceeding is a Chapter 13 proceeding.
 4. The method of claim1 wherein determining the present value comprises determining thepresent value associated with a single non-precedence claim, wherein thesingle non-precedence claim is an unsecured claim.
 5. The method ofclaim 1 further comprising, after entering the bankruptcy data andbefore determining the present value, preprocessing the bankruptcy plandata.
 6. The method of claim 1 further comprising, before entering thebankruptcy data, sending a request to a data center for the bankruptcydata.
 7. The method of claim 1 wherein the precedence claims comprisesecured claims and priority claims.
 8. The method of claim 1 whereindetermining the present value comprises determining the present value ofall non-precedence claims; and outputting the present value using anoutput device.
 9. The method of claim 8 wherein the output device is adisplay device.
 10. The method of claim 1 further comprising: outputtingthe present value on an output device.
 11. A computer readable mediumcomprising: code for entering bankruptcy data associated with abankruptcy proceeding after a debtor has filed for bankruptcy, whereinthe bankruptcy data comprises precedence claim data associated withprecedence claims, non-precedence claim data associated withnon-precedence claims, and bankruptcy plan data; and code fordetermining a present value associated with at least one non-precedenceclaim using the digital computer.
 12. The computer readable medium ofclaim 11 wherein the bankruptcy plan data comprises plan terminformation, plan base information, and monthly payment information. 13.The computer readable medium of claim 11 wherein the non-precedenceclaims comprise unsecured claims, and wherein the bankruptcy proceedingis a Chapter 13 proceeding
 14. The computer readable medium of claim 11further comprising: code for determining the present value associatedwith a single non-precedence claim, wherein the single non-precedenceclaim is an unsecured claim.
 15. The computer readable medium of claim11 further comprising code for preprocessing the bankruptcy plan data.16. The computer readable medium of claim 11 further comprising code forsending a request to a data center for the bankruptcy data.
 17. Thecomputer readable medium of claim 11 wherein the present value isassociated with a specific unsecured claim; and code for outputting thepresent value using an output device.
 18. The computer readable mediumof claim 11 wherein code for determining the present value comprisescode for determining the present value of all non-precedence claims; andwherein the computer readable medium comprises code for outputting thepresent value on an output device.
 19. A server computer comprising thecomputer readable medium of claim
 11. 20. A system comprising: theserver computer of claim 19; a client computer operatively coupled tothe server computer; and an output device operatively coupled to theclient computer.
 21. A method comprising: entering bankruptcy dataassociated with a plurality of different courts into a digital computer;preprocessing the bankruptcy data; and determining a present valueassociated with at least one claim using the preprocessed data and thedigital computer.
 22. The method of claim 21 wherein the at least oneclaim is a secured, priority, or unsecured claim.
 23. The method ofclaim 21 wherein the different courts are bankruptcy courts.
 24. Themethod of claim 21 wherein preprocessing includes standardizing thebankruptcy data received from the plurality of different courts.
 25. Acomputer readable medium comprising: code for entering bankruptcy dataassociated with a plurality of different courts into a digital computer;code for preprocessing the bankruptcy data; and code for determining apresent value associated with at least one claim using the digitalcomputer and the preprocessed data.
 26. The computer readable medium ofclaim 25 wherein the at least one claim is a secured, priority, orunsecured claim.
 27. The computer readable medium of claim 25 whereinthe different courts are bankruptcy courts.
 28. A server computercomprising the computer readable medium of claim 27.